- - Sunday, September 12, 2010

PERU

President to shuffle Cabinet this week

LIMA | Peruvian President Alan Garcia said on Sunday that Prime Minister Javier Velasquez will step down as part of a broader Cabinet shuffle that will be carried out this week so ministers can run for political office.

Normally in Peru, all ministers offer their resignations when a prime minister quits, but Mr. Garcia is expected to reappoint most of his Cabinet. He has denied comments from insiders in his APRA party and the government that Finance Minister Mercedes Araoz would be replaced.

“The ministerial changes will be announced on Tuesday. I’m accepting the resignation of Javier Velasquez and his entire ministerial team,” Mr. Garcia said in a report by state news agency Andina.

Ministers must resign by October if they want to run for Congress or other posts in general elections next year.

Peru is one of the world’s fastest-growing economies, and Mr. Araoz has been criticized by the central bank for allowing government spending to rise too quickly.

IRAN

Hiker to be released on $500,000 bail

TEHRAN | A senior Iranian prosecutor said Sunday that authorities will release a jailed American woman on $500,000 bail because of health problems, another sudden about-face by Iran in a case that has added to tension with the United States.

The news came during a weekend of start-and-stop announcements about the release of Sarah Shourd, who was detained with two friends, Shane Bauer and Josh Fattal, along the Iran-Iraq border on July 31, 2009, and accused of spying.

The woman’s Iranian lawyer met with the three Americans in Tehran’s Evin prison on Sunday and said he is hopeful Miss Shourd will be released in the next two or three days.

Tehran prosecutor Abbas Jafari Dowlatabadi said the conditions of her bail do not bar her from leaving the country, though her case will still go to trial along with those of the other two Americans, who must remain in custody.

EUROPEAN UNION

Source: Regulators agree on bank rules

BASEL, Switzerland | Global financial regulators on Sunday agreed on new banking rules designed to rein in the excessive risk blamed for triggering the credit crunch and subsequent economic crisis, an official said.

Banks will be forced to hold more and safer kinds of capital to offset the risks they take lending money and trading securities, which should make them more resistant to financial shocks such as those of the last several years.

Some banks have protested that the new rules may hurt their profitability and cause them to reduce the lending that fuels economic growth, possibly dampening a global economic recovery.

An official familiar with the talks says representatives of major central banks agreed to the deal at a meeting in Basel, Switzerland.

The official spoke on condition of anonymity because the deal had yet to be officially announced.

The agreement, known as the Basel III rules, is seen as a cornerstone of the global financial reforms proposed by governments after the credit crunch and subsequent economic downturn caused by risky banking practices.

EGYPT

Low water level blamed for Nile oil spill

LUXOR | The captain of a barge that leaked some 100 tons of diesel into the Nile River in southern Egypt blamed a drop in water levels for the spill, a security official said Sunday.

Capt. Yasser Hussein told police that low water levels caused the boat to tilt and partially submerge Saturday after it docked to unload in Aswan, allowing the fuel to leak.

The official said Sunday the barge was unloaded to refloat it.

He spoke on condition of anonymity because he was not authorized to speak to the media.

Luxor Gov. Samir Farag said the small slick fragmented as it passed through an area of dense grass.

A senior official, Hussein Ali, said the slick is 60 yards wide and 1.2 miles long.

BRAZIL

Graft scandal heating election campaign

BRASILIA | Brazil’s ruling party candidate, Dilma Rousseff, is under renewed pressure to defend her wide lead in October’s presidential race after a new corruption scandal surfaced over the weekend.

The leading newsmagazine Veja accused Ms. Rousseff’s former aide and current presidential chief of staff, Erenice Guerra, of involvement in an alleged graft scandal.

Veja said Ms. Guerra had helped obtain public works contracts for entrepreneurs in exchange for kickbacks to her son’s consultancy.

Ms. Guerra denied the accusations and said her bank accounts were open for the public to scrutinize, Veja said.

At the time of the alleged fraud last year, Ms. Guerra was the assistant to then chief of staff Ms. Rousseff, who opinion polls show is set to win the Oct. 3 election by a landslide.

The latest scandal, which featured prominently in all of Brazil’s major newspapers Sunday, is certain to fuel renewed attacks against Ms. Rousseff by her main rival, Jose Serra of the opposition PSDB party.

From wire dispatches and staff reports


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